Macau Casinos Flutter, as Chinese Enclave Deals with New COVID-19 Cases
Posted on: October 1, 2021, 07:18h.
Last updated on: October 5, 2021, 10:13h.
The new norm for Macau casinos seems to be dealing with the atypical, and September once again presented China’s gaming industry with a slew of unique challenges.
Macau’s six licensed commercial casino operators combined to win MOP5.87 billion (US$735 million) in September. They did so as concerns regarding a potential outbreak of COVID-19 cases arose in the region.
One of two Special Administrative Regions (SAR) in China, the other being Hong Kong, Macau confirmed eight new coronavirus cases in the latter part of September. The virus’ spread resulted in the reimplementation of tighter entry protocols in and out of Macau.
Earlier this week, Macau’s Pear River neighbor, Zhuhai in the Guangdong province, announced that effective September 29, all inbound travelers from Macau are required to undergo 14 days of quarantine. No region is more important to Macau’s economic health than Guangdong, as the province accounts for the largest percentage of mainland China trips to Macau.
Macau has also shortened the validity of recent negative COVID-19 tests for entry and exit from 72 hours to 48 hours.
September’s $735 million casino win represents a 166 percent year-over-year gain on September 2020, and a 32.4 percent increase on August. However, the enclave’s 2021 third quarter performance was down 26 percent from the second quarter of the year.
China’s casinos have experienced a bumpy and largely unpredictable nine months in 2021. There seemed to be a recovery underway when Macau gross gaming revenue (GGR) improved each month from $912.4 million in February through May, when the enclave casinos won $1.3 billion.
But June ended the run, as new coronavirus concerns led to the region reporting GGR of $820 million. July and August saw more turbulence, as the industry won a little more than $1 billion in July, and then stumbled to $554 million in August after four COVID-19 cases in Macau were identified.
Today marks the start of China’s Golden Week, typically a robust time for Macau. But the border requirements will greatly diminish what was previously expected to be a fruitful time. GGRAsia relayed this week that only five of the region’s casino hotel resorts are sold out for the seven-day holiday week.
There is much uncertainty surrounding Macau’s casinos, which generate, by far, more gaming revenue each year than any other market in the world.
China and Macau continue to debate new regulations that will be implemented when the enclave issues new operating rights next June. All six current concessionaires are likely to receive fresh tenders. But analysts believe the market might be more restrictive, especially when it comes to high rollers and how they move money from the mainland to the Macau. COVID-19 only adds further uncertainty to the market.
Regardless, Wall Street reacted positively to the September GGR report. In early morning trading today, the US-listed casino firms operating in Macau each made gains.
Las Vegas Sands climbed 2.5 percent, MGM Resorts 2.25 percent, Wynn Resorts 1.5 percent, and Melco Resorts two percent.
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